Corporate income tax in Lithuania
Corporate income tax in Lithuania is paid by domestic companies – residents, non-residents and non-resident permanent establishments that perform economic activity in the country.
Taxable objects in Lithuania
Corporate income tax in Lithuania is applied to the profit or loss, which is calculated according to the taxpayer’s financial accounting data and adjusted according to the Corporate Income Tax Law.
In general, all types of income are included in the taxable income consisting of:
- income earned in Lithuania or abroad (for residents);
- certain types of income earned in Lithuania and listed in the Corporate Income Tax Law (for non-residents);
- income earned from performing commercial activities in Lithuania (for non-resident permanent establishments).
Tax rate and taxation on dividends in Lithuania
The flat corporate income tax rate in Lithuania is 15% of the taxable income. Payments of dividends between domestics companies are not subject to corporate income tax. Dividends paid to a legal entity – a resident of a European Union member state or a resident of the European Economic Area – are exempt from taxation.
Dividends paid to a legal entity outside the European Union or the European Economic Area, are subject to a 15% tax payable at the time of their payment (unless double taxation treaty provides smaller withholding tax rate ).
Taxation of income
Corporate income tax in Lithuania is applied to the following payments in accordance with tax rates stipulated in the Corporate Income Tax Law:
- interest – 0 % or 15 % if loans or bonds repayment starts after 1 year, EEA bank deposit opened after 2014 January 1st, EEA state’s government securities acquired after 2014 January 1st .
- royalties – 10% (no deduction, Double taxation treaty rates may apply);
- capital gains from sale and lease of real estate located in Lithuania– 15%;
- payments to persons located in low-tax or tax-free countries or territories – 15%.
To find out more about corporate income tax in Lithuania, please contact our lawyers at firstname.lastname@example.org.
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